Unions in energy sector threaten strike action over employee shares

The National Energy Workers’ Section of the NSZZ Solidarność trade union is planning to hold a referendum on whether to call a general strike. The union activists maintain that the government has not been fulfilling its obligations under the agreements on the de-merger of energy distribution systems. Moreover, they contend that the government has not honoured the right of employees to convert their shares into securities issued by the companies created during the organisational transformation of the Polish energy sector.

On 10 February 2007, all of the major trade union organisations active in the Polish energy sector announced that they were on standby to strike. The sector’s employees fear that they may lose out because of the reforms in the energy sector; to safeguard against such outcomes, the employees are demanding amendments to the statutory provisions regulating the distribution of employee shares in the newly-established companies, along with guaranteed severance benefits for any workers made redundant.

Background to conflict

The conflict in the energy industry had been simmering for a long time. In early September 2006, tensions flared up once again when the trade unions demanded that the implementation of the government’s strategic ‘Programme for the electric energy sector’ be suspended (PL0701029I). The unions also objected to the launch of the government-led consolidation of the energy sector without prior consultation with the social partners. They argued that, from the perspective of the sector’s employees, the entire consolidation process had lost whatever transparency may have existed previously; among other reasons, this was attributed to the fact that the shares allotted to them may prove to be devoid of market value.

These problems continue to engender much controversy in the industry. Reorganisation of the energy sector has been associated with the consolidation of energy facilities. However, the employees are concerned that the value of their shares may not be maintained in the four newly established holding companies, fearing instead that they may receive less valuable shares in the individual companies assembled within these holdings. This issue lies at the heart of the dispute between the unions and the Ministry of the State Treasury (Ministerstwo Skarbu Państwa, MSP) and Ministry of the Economy (Ministerstwo Gospodarki, MG). At present, the draft legislation drawn up by these two ministries is being considered by the tripartite team for the energy sector; it has not yet been determined when the draft will be passed to the lower chamber of parliament. In the meantime, consolidation of some of the entities operating in the sector is well underway. The unions are making it clear that, if the employee demands are not met, a general strike may take place.

Trade union reaction to draft legislation

Trade unions have widely criticised the government’s legislative act, already in its second draft, which would regulate the terms under which eligible employees can convert their shares in the newly established companies formed as part of the energy industry’s transformation. The trade unions contend that the government is in breach of previous agreements concerning the process of de-merging operators of distribution systems – a process on which, they point out, the unions were meant to have been consulted. As it turns out, the Minister of the Economy, Piotr Woźniak, has instructed the management of the energy companies to limit themselves to a perfunctory query.

In response, trade union leaders maintain that the separating out of new operating entities, without what they consider to be real dialogue, will entail the closure of a number of entities and the loss of jobs. As a result, the National Energy Workers’ Section of Independent and Self-Governing Trade Union ‘Solidarność’ (Niezależny Samorządny Związek Zawodowy ‘Solidarność’, NSZZ Solidarność) has announced its plans to hold a referendum to gauge support for a general strike, tentatively scheduling it for the spring of 2007. In addition, NSZZ Solidarność’s National Energy Workers’ Section has also appealed to the other union organisations active in the industry to join in its referendum. Meanwhile, the Secretariat of Mining and Energy of NSZZ Solidarność has decided to report the dispute to the European sectoral federations – the European Mine, Chemical and Energy Worker’s Federation (EMCEF) and the International Federation of Chemical, Energy, Mine and General Workers’ Union (ICEM).

Commentary

The ‘Programme for the electric energy sector’, adopted by the Polish government on 28 March 2006, consists of three parts. The first part describes problems facing the sector; the second section outlines the key elements of the programme and the stages for its implementation; while the third part is a schedule of the most important actions and decisions of the programme. One of the main elements of the overall programme concerns the separation of independent distribution system operators – a move which aims at reducing the cost of electricity distribution, while making the sector stronger and more competitive.

Despite its aims, the circumstances of the programme’s realisation have not appeared to be conducive to stabilisation of the sector. On the one hand, the employees are demanding that their privileged access to shares in the consolidated groups be secured; on the other hand, private sector investors have expressed concerns in relation to their opportunities for profit. Some investors have already bought employee shares from the workers of the BOT Górnictwo i Energetyka holding company and of Południowy Koncern Energetyczny; however, these investors stand to lose money on this operation as the draft legislation stipulates that the right to convert such shares in the new entities will not extend to those entities that bought the shares from employees (as opposed to the employees themselves). If this provision eventually becomes law, it will be in line with the trade unions’ demands, possibly preventing a drop in the market value of employee shares precipitated by the initial public offerings (IPOs) of the newly established holding companies. The investors, for their part, argue that such a solution would run contrary to the Polish constitution – presumably because it curtails market freedom – and that, accordingly, the government would be liable to claims by entities suffering losses on this account.

Jacek Sroka, Institute of Public Affairs